The news: Reddit delivered a breakout Q2 2025, posting $500 million in revenues, up 78% YoY, including $465 million in ad revenues—an 84% jump from the prior year.

• The platform reported net income of $89 million, adjusted EBITDA of $167 million, and free cash flow of $111 million.
• Global daily active uniques (DAUq) rose 21% to 110.4 million, with US DAUq up 11% and international DAUq growing 32%. Notably, Reddit’s US ARPU climbed 59% YoY to $7.87, a sign of improving monetization efficiency.

Why it matters: Reddit is now firmly a billion-dollar ad business in the US in 2025—a year ahead of schedule, per our forecasts. But while it’s scaling fast, Reddit still captures just 1.1% of US social ad spend, far behind giants like Instagram and Facebook, which together command over 70%.

Despite gains in engagement—Reddit will be the only major platform to grow time spent per US user in 2025, per our forecasts—it remains largely additive to media plans, not foundational. Meanwhile, as much as 50% of its traffic still depends on Google Search. Reddit’s user growth has slowed over the past few quarters, perhaps a byproduct of search algorithm volatility.

Our take: Reddit’s Q2 results confirm it’s on a powerful growth track. It’s rare to see 78% topline expansion paired with profitability and strong margins. Its investment in AI-powered ad tools like Reddit Answers, Conversation Summaries, and Shopping Ads is paying off with early signs of stronger clickthrough and ROAS.

But the bigger question is whether Reddit can consistently shift advertiser perceptions. It excels at surfacing high-intent users and community insights, but remains underweighted in many media plans. “There are just thousands more advertisers that can be on our platform,” Reddit COO Jen Wong told EMARKETER after earnings were posted. “We’re doing a good job acquiring new advertisers and marketing to our scaled segment—but there are so many we haven’t touched yet.”

The $1 billion milestone is a credibility win—but now Reddit must prove it can sustain this momentum, build direct traffic channels, and earn a permanent seat at the table for bigger brand budgets.